Relationship between Remittance and Household Expenditure in Benin: Evidence from ARDL Model

This study examines the short- and long-run relationship between remittance and Benin household expenditure. We analysed 45 years of time series data, from 1974 to 2019, from the World Bank Open data repository using the autoregressive distributed lag (ARDL) to cointegration model. The findings suggest no significant long-run relationship between remittance receipts and household expenditure. However, the short-run relationship is positive and significant indicating that household remittance increases their expenditure solely in the short run. Development aid and trade openness used as control variables are negatively associated with household expenditure. These do not significantly increase household expenditure in the short and long-run. We recommend that policymakers in developing countries like Benin adopt instruments that encourage remittance inflows and promote household efficient use to meet short- and long-run expenditure needs.